Saturday, August 22, 2009

A simple, free market Healthcare Reform proposal

Support the Health Independence Act of 2009Ralph BristolAugust 22, 2009

We don't have a health care problem in America. What we have is a health insurance problem and a health care pricing problem. There are simple, free-market answers to each of those problems.

Here is my solution to the health insurance and pricing problems America now faces. My solution is by far the simplest, involves the least government interference and participation, and injects a healthy degree of independence and "market" in the health care and health insurance market. That’s why I call it the Health Independence Act. All I need now are sponsors.

1.Remove all employer tax deductions for health insurance and transfer that deduction to individuals by increasing the size of the standard deduction or the personal exemption. The size of the personal deduction should be related to age, not income, or to some other factor, or factors, that affect health insurance costs.

2.Remove barriers for health insurance companies competing in the various states. Create a new federal minimum standard for insurance policies that can be sold anywhere in the United States. Companies would have to satisfy the state standard OR the federal standard, to sell insurance in your state.

3.Encourage the private market to create insurance clearinghouses, where people can log on to the Internet, fill out a standard questionnaire about their health and history, without their personal information, and get estimates from health insurance companies across the United States, so that they could more easily shop for affordable insurance.

4.Insurance companies could not refuse to insure people with pre-existing conditions, but they would be allowed to them up (limits may be necessary) for those conditions IF the person has not been continuously insured for a reasonable (debate reasonable) period of time (5 years?)?

5.Anyone, outside Medicare and the VA system, who determines that he or she cannot afford private insurance, must be accepted in the state’s Medicaid system, AND pay a premium for that insurance – one that their income will allow, based on a sliding scale.

6.State and federal governments would continue to share funding responsibilities for Medicaid, with the help of the sliding scale premiums.

7.Medicare will not be affected by this legislation. Medicare solvency problems will be handled separately from this health care reform legislation.

8.Those who choose not to buy insurance will be personally responsible for their own health care needs. If they have a catastrophic problem they cannot afford, they will be treated, just as now, but the bill for that treatment will stay with them, with modest interest, until they pay it or die, and if they die before it’s paid, there will be a lien against their estate to help settle the bill.

What I believe will happen as a result is that people will begin to treat health insurance like car insurance and homeowners insurance, and the tax law changes will absorb much of the personal budget shock.

As time goes on, you’ll see both health care cost and health insurance costs drop, or at the very least, increase as a MUCH slower pace, due to a major influx of free market forces, resulting in major personal savings over time, and a natural redirection of personal spending to other areas of the economy, rather than so much going to health care.

I have not addressed such issues as tort reform and transparency in healthcare pricing because I think such issues are better dealt with separately, and/or solved by market pressures.